BUCHAREST (Romania), January 28 (SeeNews) - Romania's consolidated budget was in deficit equivalent to 6.72% of the gross domestic product (GDP) at the end of last year, compared to a gap of 9.61% of GDP in 2020, the finance ministry said on Friday.
The government spent approximately 14.76 billion lei ($2.9 billion/3.3 billion euro) on extraordinary payments related to the Covid-19 pandemic in 2021, the finance ministry said in a statement.
The consolidated budget deficit amounted to 80 billion lei as at the end of December, as revenues rose 17.7% year-on-year to 379.6 billion lei while spending increased by 8.3% to 459.6 billion lei.
Tax revenues increased by an annual 15.1% in 2021, social security contributions grew 13.6% and VAT proceeds jumped by 30.5%. The rate of excise duty collection was up 12.3% on year, driven by an annual 9.4% increase in tobacco excises and a 14.8% hike in energy excises.
Investments rose by 11.5% to 59.3 billion lei in 2021.
During last year, Romania received 38.4 billion lei from the European Union, up 14.5% compared to 2020.
Romania planned a deficit equivalent to 7.16% of GDP and 7% economic growth in its 2021 state budget.
For 2022, the finance ministry projects a cash deficit equivalent to 5.84% of GDP and 4.6% economic growth. The deficit under the European System of Accounts (ESA) standards is set at 6.24% of GDP.
According to the EU's Maastricht treaty signed in 1992, the ratio of the annual general government deficit relative to GDP at market prices must not exceed 3% at the end of the preceding fiscal year. However, the European Commission said in November that no additional measures need to be taken within the excessive deficit procedure for Romania for the time being but it will reassess the situation once the new government presents the 2022 budget and a medium-term fiscal strategy.
(1 euro=4.9459 lei)